Carbon capture and storage: a necessary transition or an expensive distraction?
28 July 2015
Author: Professor Stuart Haszeldine, SCCS, Scottish Carbon Capture and Storage, School of GeoSciences, University of Edinburgh
Carbon capture and storage (CCS) is a proven method of enabling utilisation of fossil fuel to produce electricity, heat and industrial products, but without the dis-benefits of greenhouse gas emissions.
Economic analysis shows that CCS is the least costly method to decarbonise across an economy. CCS is particularly suitable to operate gas-fuelled power plants in combination with variable renewable electricity.
What is carbon capture and storage (CCS), and why is it useful?
Carbon capture and storage (CCS) covers a basket of technologies which enable separation of carbon dioxide (CO2) from the flue gases resulting from combustion of fossil fuel such as gas, coal, or oil (Hone 2014). The separation can be achieved by at least three different methods at large commercial scale, with reduced cost methods under active development worldwide.
Separated CO2 is liquefied by compression, and this can be transported by pipeline or by shipping many tens or hundreds of kilometres, to be injected down boreholes into safe and secure geological storage between one and four kilometres below the land surface or seabed.
The usefulness of CCS lies in its ability to continue harvesting the benefits of intense flexible energy from fossil fuel use, while disconnecting those benefits from the harmful emissions of greenhouse gases. CCS can be fitted to an existing or new power plant fuelled by gas or by coal, and can also be applied to reduce emissions from large process industries such as fertiliser manufacturing, petrochemicals, plastics, or cement.
When considered as part of a national electricity and heat supply system, and as part of a national plan to reduce greenhouse gas carbon emissions with efficiency and renewables, CCS is immensely attractive. It is the only technology which directly reduces carbon emissions, and it can be built and located as part of an existing electricity generation and supply system. No new power plant sites are needed, and no new electricity supply cables are needed.
Unlike many technologies that produce low-carbon electricity, power stations that produce low carbon electricity with CCS can vary controlled output during the day, or during the year. This flexibility offers very strong benefits into managing and balancing variable electricity output within a renewable electricity system.
Why should anybody bother?
CCS is more difficult, and more expensive, than traditional methods of electricity generation by burning coal or gas. However, the CO2 emissions from traditional coal and gas combustion are released into the atmosphere, which is a common global property.
It is very clear that since the Industrial Revolution of the early 1700s, the CO2 content of the global atmosphere has increased exponentially, and the rate of increase is continuing to speed up.
These increases are directly linked to the known historical rates of fossil fuel extraction and combustion, and the present day ever-increasing rates of coal and oil combustion.
Because these rates of carbon release are so fast, the Earth has no time to securely remove CO2. This excess CO2 causes global warming, via the greenhouse effect. Global measurements show that temperature has increased by 0.8 C since the Industrial Revolution.
Warming of the ocean expands water volumes, and produces a rise in the sea level. This is enhanced by melting of ice from glaciers in mountain belts, Greenland and Antarctica.
The sea level has already risen by tens of centimetres. CO2 also dissolves into the ocean and causes acidification of the most productive upper water layers. The acidity of ocean water has increased by a third since the Industrial Revolution, and it is clear that catastrophic effects on ocean life are starting to occur.
Because the rate of fossil carbon emission is so high, this can be simplified into a calculation that it is only the total quantity of fossil carbon emitted which matters during human lifetimes.
To have a 50 per cent or better chance of keeping global warming to less than 2°C, it is widely agreed among climate scientists that a total budget is 1,000 billion tonnes of fossil carbon (one trillion tonnes). The world will break that budget well before 2050.
CCS is unique in energy technologies, because it is not justified by being more efficient, or by being cheaper at the power plant or industrial site. It is justified, instead, by reducing emissions, the cost of which is not included in the emissions from any individual country. Calculations by the USA, or the UK environmental agencies of government place the global damage from each tonne of CO2 at $40.
Although according to the International Monetary Fund (IMF 2015) the lack of cost for ‘free dumping’ amounts to a subsidy for fossil fuel use of $5,300 billion per year, which I calculate to be $240 for each tonne of CO2. Although most of that damage is in developing nations, there is a clear argument that emissions of fossil carbon should be taxed much more severely, so the funds can be redeployed locally to eliminate damage.
A total of 160 global corporations have signed up for such action, as have the six largest European hydrocarbon extraction companies (Prince of Wales 2014, FT 2015). In June 2015, the G7 global leaders recommitted to the phasing out of fossil carbon emissions. It is clear that old-style unabated combustion of coal and gas has become unacceptable.
What value has CCS?
The value of CCS spreads across the whole economy of a country, and hence is indirect, which means that fossil fuel users need to be encouraged and assisted to install CCS. Firstly, the headline figures. Several organisations have calculated the most cost-effective pathway towards low carbon economies.
These include the Intergovernment Panel on Climate Change (IPCC), the UK Energy Technologies Institute (ETI, 2014), and the International Energy Agency (IEA).
All these groups arrive at a similar conclusion: action on CCS has much greater effects than if simply considered as just being expensive electricity. Because carbon pricing in Europe and elsewhere will inevitably increase, then CCS will provide a lower cost alternative than paying national or federal carbon taxes.
Those financial benefits start to occur from 2025, and certainly occur from 2030. By 2050, applying CCS in the UK economy makes the cost of energy transition to lower carbon 2.5 times cheaper than avoiding use of CCS.
Does CCS exist globally, in Europe, in the UK?
Globally, all components of CCS are proven, the challenge has been to assemble these into applications operating continually on power plant, at low cost. The techniques and processes to separate CO2 from flue gases have been applied in oil refineries since the 1920s.
The engineered injection of CO2, for secure retention deep below ground, has been practised safely since the 1970s by USA corporations to enhance oil recovery. Since 1996, the Norwegian oil company Statoil has safely and securely stored 1,000,000 tonnes per year of CO2 in sandstones one kilometre beneath the North Sea bed.
In 2014 the first commercial coal-fuelled power plant started operation with CCS at Boundary Dam in Canada. In mid-2015 three additional commercial projects will open in Canada and the USA. There are many tens of test, pilot and planned CCS projects, and tens of operational CCS projects globally (SCCS 2015a). These range from power plant, to gas processing, industrial applications of ethanol manufacturing, hydrogen, steel, cement (MIT 2015).
In Europe, progress on CCS has been slow, because of complex and inadequate funding arrangements. The European Commission’s ambition was 12 projects to be operational by 2014. At present only the ROAD project on a new coal plant in the Netherlands is ready and awaiting national funding. The Peterhead-Goldeneye gas-fuelled project in the UK, and the Drax-5/42 White Rose coal-fuelled project in the UK are undergoing full FEED studies.
In the UK, a long road has been travelled to develop CCS. However the UK has shared (DECC 2011), and intends to share, the learning and technical benefits worldwide. In 2007, the UK recognised CCS as a long duration development proposition.
A separate unit within the Department of Energy was created to design the relevant regulations, the UK claimed offshore pore space for CO2 disposal purposes, and a financing mechanism was created to give capital grants to the first commercial projects, together with a premium price of electricity to fund the operational expenditure of commercial CCS electricity generation.
The UK ambition is to decarbonise at low cost and, consequently, developers are asked to negotiate closely with government in setting a mutually agreeable price. The first two projects are intended to take their Final Investment Decisions during early 2016, and be generating electricity from 2019 and 2020.
A second phase of CCS developments is now in discussion with international developers, including CCS applied to industrial complexes by the Teesside Collective (2015), and the Caledonia Clean Energy Project hybrid electricity plus hydrogen generation from Summit Power at Grangemouth may supply CO2 for Enhanced Oil Recovery (EOR) in the North Sea (SCCS 2015b).
And in Ireland?
As with all European states, Ireland is now part of a collective energy journey, and will need to produce a decarbonisation plan towards 2030, with the Energy Union being one of the top 10 priorities (EU 2015). There are some similarities with the UK experience, and some differences, explored in a Royal Irish Academy conference (RIA 2010).
A strategic design priority is to understand the potential to link from sites of intensive CO2 emissions, to sites of potential secure storage. Surveys of CO2 storage offshore of all-Ireland have been undertaken by SLR in 2009, with a more detailed study of the Irish Sea by Geological Survey Ireland in 2011-14.
There is potential practical storage of 1,500 million tonnes CO2, sufficient for about 100 years of current power plant emissions. These surveys clearly show that the potential westwards is difficult and expensive; south of Kinsale the depleted gas fields and intervening sandstones have high potential but are small; and offshore from Dublin depleted gas fields and large aquifer sandstones of the Irish Sea have good potential.
This means that renewal of Moneypoint power plant faces severe strategic design hurdles to avoid becoming a stranded asset. This must ensure that CO2 can either be pipelined to storage far offshore, or can be transported by shipping to EOR in Scotland, or aquifer storage offshore.
It is probable that re-use of depleted gas fields will provide the best understood, most secure sites, with the potential to convert existing pipelines and offshore facilities to transport and inject CO2, which can save both time and cost – as at Peterhead in the UK.
It is, of course, tempting for government and for industry to defer action. Why do anything now? Maybe it is easier to simply purchase greater numbers of emissions permits? In the short term to 2020, that may indeed be a viable option. But it is clear that the price of carbon is intended to increase around Europe, and that electricity generation is a prime target.
It is also clear that developing the first CCS projects is a long duration operation, which needs to be started now. The two key parts are to define secure storage, and to create a financial mechanism to reimburse additional operating expenditure. If correctly constructed, a premium tariff can also enable borrowing to partially fund the capital construction costs.
Simply relying on continued construction of wind, or tidal, renewables will mean a combined need for much greater energy storage to supply hours or days of missing output, combined with increased electrical grid interconnection to the UK and EU – which will mean purchase of infill power at the highest premium costs during wind shortages. Supplying electricity reliably at low cost needs both a tactical plan for tomorrow, and a strategic plan for five, 10 and 30 years ahead.
EU 2015 Energy Union http://ec.europa.eu/priorities/energy-union/index_en.htm
(DECC 2011) First Demonstration: Front End Engineering Design Studies (FEED) http://webarchive.nationalarchives.gov.uk/20111209170139/https:/www.decc.gov.uk/en/content/cms/emissions/ccs/demo_prog/feed/feed.aspx
ETI 2014 Potential for CCS in the UK http://www.eti.co.uk/wp-content/uploads/2014/03/ETI_CCS_Insights_Report.pdf
(FT 2015) European energy groups seek UN backing for carbon pricing system. Financial Times 31 May 2015
(Hone 2014) Putting the genie back, 2C will be harder than we think. http://www.amazon.co.uk/dp/B00NRLDMKY/?tag=a_fwd-21
(IMF 2015) http://www.imf.org/external/pubs/cat/longres.aspx?sk=42940.0
(MIT 2015) CCS projects database https://sequestration.mit.edu/tools/projects/
(Prince of Wales 2014) http://www.climatecommuniques.com/
(RIA 2010) Carbon capture and storage, bridging the transition from fossil fuels to renewables http://www.ria.ie/ccs.aspx
(SCCS 2015a) Global projects map http://www.sccs.org.uk/expertise/global-ccs-map
(SCCS 2015b) Grangemouth CCS http://www.sccs.org.uk/news/2015/03/27/great-news-for-grangemouth-ccs-plans
Teesside collective 2015 http://www.teessidecollective.co.uk/